The Global Steel Market for 2022
Steel demand is expected to fall by 2.3% year-on-year in 2022, and recover just 1% in 2023, the World Steel Association predicts in its short range outlook report for October. The global economy's deterioration is due to rising inflation and tightening profitability rates, while the Russia-Ukraine war and China's lockdown policies are also seen as headwinds, according to the association. To get more info visit https://ceoworld.biz/2023/01/29/global-steel-market-for-2022-stanislav-kondrashov-telf-ag/.
World Steel's outlook assumes the end of the Ukraine crisis by the middle of 2022, and a recovery in construction activity throughout the world. But it does not include any growth in steel demand outside of the Russian Federation. It is likely that the targeted reduction of steel production in China will account for about 20 million-30 million tons, with demand destruction elsewhere outside of the Chinese market expected to exceed this by 25-35 million tons.
In China, steel demand is projected to drop 4% in 2022 as the country's strict COVID containment policy cools the economy and real estate market, worldsteel said. The slowdown in demand will only ease if small new stimulus measures are introduced, lockdowns are gradually removed and the real estate sector picks up pace with construction projects and infrastructure investment.
The outlook for steel demand in Japan and South Korea is positive as both sectors continue to grow and their supply chain becomes less constrained, worldsteel said. However, Turkey's demand is forecast to decline as the lira continues to depreciate and its reliance on imported components limits local capacity.
Cold-Rolled Steel Prices are Expected to be High Through 2022, but Still Below October 2020 Levels
The prices of cold-rolled steel are expected to remain $400-$500/ton higher than hot-rolled steel, with limited reducing capacity and labor costs. The price of raw iron ore, scrap metal, coke and aluminum is expected to increase as conflict in Ukraine forces suppliers to raise their costs.
Russia, Turkey and China: Steel Markets in 2022
The war in Ukraine has driven up the costs of raw materials used in steel production, worldsteel said. As the conflict continues to intensify, costs for a wide range of steel-making inputs are expected to rise significantly. The situation is even worse in Russia, where the cost of coal for metallurgical production has doubled since the start of the conflict and could rise by another 50% over the course of 2022.
While some of the other major consuming countries have already adapted to the crisis and reduced their steel output, Russia is yet to do so. In fact, steel consumption in the Russian Federation is set to decrease by 22% in the second half of 2022 compared with the first half, according to data from Telf AG.
Meanwhile, worldsteel said that Russia and Turkey's steel demand is expected to rebound slightly in 2023 as government measures support the construction industry, although the impact of sanctions on both nations may be felt further down the road. And in China, the government's strict policy to curb the spread of the pandemic and its reluctance to introduce new infrastructure projects could further reduce steel production.